This isn't really syncing. This is using the same file from multiple locations. It can be dangerous if you have the same application open in multiple locations and they both try to modify the file. Changes could get lost or the file could get corrupted.

This can indeed be used for all sorts of things. There are special issues, though, when used with application data for apps that are used all the time and write lots of data to the folder, like Camino.

1. You'll be doing lots and lots of synching. I tried this with Camino a few weeks ago, and Dropbox was almost always active.
2. You have to make sure you quit Camino on computers that you aren't using at the time. If you don't, you'll end up with conflicts. Dropbox handles these great, but you'll have multiple copies of the conflicting files and have to manually determine which is correct. This kind of defeats the purpose.

One way to deal with this is to determine the minimum data you want synched and just symlink those specific files. For example, you probably don't need your history synched, and may not even need session data synched. You may even be able to get by with just the bookmarks.

If all you're synching is the bookmarks file, then the actual synching activity will be lower, the chance of conflicts is lower, and the problems created by accidentally leaving the browser open on another computer are minimal.

People just do not consider the security ramifications of anything these days. The contents of your browser folder can very likely contain enough information to completely bankrupt you and potentially much worse, if somebody else were to get at it. I wouldn't upload the contents of that directory to anyone else's computers (which is precisely what you are doing) unless it were in a highly encrypted disk image or other archive format---and then I would only do so if I had no other way to transfer the data.

If you have ever used a browser to buy something online, access your bank accounts, file your taxes, manage your health insurance, file government papers, and so on, you risk losing your identity by messing around like this.

People just do not consider the security ramifications of anything these days. The contents of your browser folder can very likely contain enough information to completely bankrupt you and potentially much worse, if somebody else were to get at it. I wouldn't upload the contents of that directory to anyone else's computers (which is precisely what you are doing) unless it were in a highly encrypted disk image or other archive format---and then I would only do so if I had no other way to transfer the data.

If you have ever used a browser to buy something online, access your bank accounts, file your taxes, manage your health insurance, file government papers, and so on, you risk losing your identity by messing around like this.

That you would compare a MySpace profile with a cookie file, cache, and potentially an unencrypted password database is the reason why hints like this are so dangerous. People don't understand the difference between safe data and dangerous data when it comes to digital. They know the difference in obvious terms---you wouldn't leave your bank statement out on your porch overnight, for instance, but when it comes to what is safe and what is not safe digitally speaking, the rules are much harder to follow.

This "cloud" stuff could all end up very badly. Especially with people using braindead passwords so they can type them in on their iPhones.

I have my 1Password keychain symlinked as well as my Safari Cookies, amongst other things.
It works great!
I've been using this on four Macs now for two months and it's superb and 100% reliable.
MobileMe and .Mac never worked this well, even though they in theory should.